Gold Price Analysis: Battle lines well-defined for XAU/USD amid light trading – Confluence Detector

Dhwani Mehta FXStreet

Gold (XAU/USD) is looking to find its feet after falling as low as $1811 last week. Broad-based US dollar weakness on doubts over the pace of the US economic recovery continues to offer support to the XAU bulls.

Although ramping up of covid vaccinations globally keeps the market mood underpinned, limiting gold’s advance. Markets look forward to the US stimulus updates amid holiday-thinned light trading for fresh impetus on the yellow metal. Meanwhile, the performance of the platinum group metals (PGM) could be also closely followed.

How is gold positioned on the technical graphs?

Gold Price Chart: Key resistances and supports

The Technical Confluences Indicator shows that gold is looking to scale key hurdle at $1827, which is the convergence of the SMA10 one-day, SMA50 four-hour and the previous high four-hour.

The next relevant resistance is seen at $1832, the intersection of the SMA5 one-day and pivot point one-day R1.

$1842 will be a tough nut to crack for the XAU bulls. That level is the meeting point of the SMA100 four-hour and Fibonacci 23.6% one-month.

Further up, a dense cluster of minor resistance levels around $1850 needs to be taken out in order to recapture the critical barrier at $1857, which is the convergence of the SMA200 one-day, SMA200 four-hour and the previous week high.

Alternatively, $1820 offers immediate support, where the Fibonacci 61.8% one-day, SMA5 four-hour and the previous low four-hour coincide.

Sellers will then target the previous day low at $1811, below which a strong cushion of $1806 could be exposed. At that point, the previous month low and Bollinger Band one-day Lower meet.

Here is how it looks on the tool

About Confluence Detector

The TCI (Technical Confluences Indicator) is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. Knowing where these congestion points are located is very useful for the trader, and can be used as a basis for different strategies.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

EUR/USD pops to yearly highs near 1.1770

EUR/USD rapidly reverses course and hits fresh YTD tops near 1.1780 at the end of the week. The pair’s U-turn comes on the back of the intense sell-off in the Greenback amid the generalised risk-on context.

GBP/USD climbs to four-month tops near 1.3600

GBP/USD is building on its solid weekly advance and is pushing toward the 1.3600 hurdle on Friday, or new four-month peaks. Cable’s strong move higher comes as the Greenback intensifies its decline, while auspicious results on the UK calendar also collaborate with the uptrend.

Gold picks up pace, approaches $5,000

Gold prices keep their uptrend well in place and gear up for an imminent hit to the key $5,000 mark per troy ounce on Friday. The yellow metal’s sharp advance gathers pace amid the increasing weakness in the US Dollar and mixed US Treasury yields across the curve.